capital accumulation

capital accumulation

capital accumulation

or

capital formation

1the process of adding to the net physical CAPITAL STOCK of an economy in an attempt to achieve greater total output. The accumulation of CAPITAL GOODS represents foregone CONSUMPTION, which necessitates a reward to capital in the form of INTEREST, greater PROFITS or social benefit derived. The rate of accumulation of an economy's physical stock of capital is an important determinant of the rate of growth of an economy and is represented in various PRODUCTION FUNCTIONS and ECONOMIC GROWTH models. A branch of economics, called DEVELOPMENT ECONOMICS, devotes much of its analysis to determining appropriate rates of capital accumulation, type of capital required and types of investment project to maximize ‘development’ in underdeveloped countries (see DEVELOPING COUNTRY). In developed countries, the INTEREST RATE influences SAVINGS and INVESTMENT (capital accumulation) decisions, to a greater or lesser degree, in the private sector (see KEYNESIAN ECONOMICS) and can therefore be indirectly influenced by government. Government itself invests in the economy's INFRASTRUCTURE. This direct control over capital accumulation, and the indirect control over private investment, puts the onus of achieving the economy's optimal growth path on to the government. The nature of capital accumulation (whether CAPITAL WIDENING or CAPITAL DEEPENING) is also of considerable importance. See also CAPITAL CONSUMPTION, INVENTION, INNOVATION, CAPITAL-OUTPUT RATIO.

the process of increasing the internally available CAPITAL of a particular firm by retaining earnings to add to RESERVES.

Inflows strong across all firm capitalizations as risk tolerance returns Investors allocated new capital to funds of all asset tiers, reflecting a moderation of the capital concentration in the industry's largest firms.

Unions, especially those in the Congress of Industrial Organizations, believed that government action was necessary to deal with capital concentration and managerial control of pricing and profits and to seek full employment.

One of the great strengths of his book is its treatment of the ways in which differing levels of capital concentration in the maritime industry affected the development of unionism on the Atlantic and Pacififc coasts.

The Reagan class spent its money on capital concentration rather than investment: on mergers, acquisitions and novel financial instruments rather than on building productive industry and renovating the decrepit social infrastructure.

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